If decentralized stablecoins are seen as a 'digital Noah's Ark' floating on the ocean of volatility, then the collateral is the ballast of this ship.
As of December 2025, Bitcoin BTC is no longer just the 'digital gold' revered on a pedestal; it has deeply engaged in the production line of synthetic assets through BTC Layer 2 and various cross-chain protocols. Meanwhile, Ethereum ETH, as 'digital oil', maintains its solid position as the core collateral for DAI (and the upgraded Sky system).
Mortgage BTC to mint USDD, and mortgage ETH to mint DAI, essentially represents the ultimate showdown of two financial philosophies and underlying risks.
Core Mechanism: The Contest of Physical Rigidity and Chemical Reaction
As collateral, BTC's greatest appeal lies in its "pure hardness." In the current macro environment, the market depth and institutional recognition of BTC have significantly lowered its volatility compared to most mainstream assets. Choosing BTC as the core reserve for USDD is akin to selecting the heaviest granite as the foundation when constructing a building. This approach attempts to hedge against the risk of algorithmic premiums through the "value consensus" of the asset itself. The logic of USDD leans more toward a decentralized "gold standard" system, using BTC's anti-inflation characteristics to back the stablecoin.
In contrast, ETH, as the soul of DAI, exhibits a form of "liquidity chemical reaction." ETH is not just an asset but also the fuel of the Ethereum network. After MakerDAO's transformation into the Sky protocol, ETH injects the minting logic of DAI through LST (liquid staking tokens). This means what you are collateralizing is not just an asset but also a "yield engine" with self-appreciation capabilities. This mechanism endows DAI with an elasticity that BTC collateral lacks — while being collateralized, the underlying asset continuously generates PoS income, forming a more complex interest spread coverage model.
Economic Model: Defensive vs. Expansionary Game
Data shows that as of Q4 2025, the collateralization rate of USDD remains above 200%, with BTC accounting for over 40%. This high collateralization rate is a typical "defensive design." The TRON ecosystem, through this approach, grants users a buffer period for liquidation in extreme black swan events. The liquidity of BTC means that the impact cost on the market during large-scale redemptions is relatively low.
In contrast, the path of DAI (USDS) has moved toward an "expansionary ecosystem." By introducing a large amount of RWA (real-world assets) and a liquid staking version of ETH, DAI has effectively become a center for credit expansion across on-chain and off-chain. The collateralization of ETH resembles a form of credit loan, anchoring the prosperity of the Ethereum ecosystem. When the Ethereum Layer 2 ecosystem achieves a massive application explosion in 2025, the intrinsic demand for ETH directly boosts the minting scale of DAI.
Risk Dimension: Single Point Vulnerability and Governance Complexity
The biggest challenge of BTC as collateral for USDD is the "bridge risk." Since BTC does not natively run on a smart contract platform, the security of the cross-chain wrapping process hangs like the sword of Damocles over our heads. Although BTC L2 technology has matured by 2025, trust costs at the cross-chain level still exist.
The challenge of ETH collateralizing DAI lies in the "governance burden." With the implementation of the endgame plan for the Sky protocol (formerly MakerDAO), governance has become extremely complex. Users not only face the risk of ETH price fluctuations but also need to engage in intricate sub-DAO decision-making. This complexity can sometimes be harder to manage for ordinary users than sheer price volatility.
Practical Value and Future Trends: How Should You Choose?
For long-term holders of BTC who are unwilling to operate frequently, minting USDD through BTC is a robust means of releasing asset liquidity. It allows you to obtain a circulating debit card without selling your gold, making it especially suitable for asset hedging in volatile markets.
For players deeply involved in the DeFi ecosystem and pursuing capital efficiency, collateralizing ETH to mint DAI remains an irreplaceable choice. Utilizing the liquidity staking returns of ETH to offset borrowing costs, or even achieving "negative cost borrowing," is currently the most mature arbitrage path in Web3 finance.
Conclusion: Two Paths of Asset Sovereignty
There are no absolute winners or losers in this duel, only the trade-offs of application scenarios. BTC collateral represents a return to the "hard currency consensus," while ETH collateral represents the ultimate pursuit of "programmable financial efficiency."
Looking forward to 2026, with more institutional-level BTC Layer 2s launching, we may see an increased proportion of BTC in stablecoin collateral. This is not just a migration of assets, but also a sign of the Web3 financial system transitioning from the "laboratory phase" to the "global clearing infrastructure."
Interactive Question: With BTC reaching $100,000 and ETH stabilizing at $8,000 today, which asset do you prefer to lock into the collateral vault?
This article is an independent analysis and does not constitute investment advice.
